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TMI Blog2025 (2) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... be sustained. Also AO has not specified which specific offence under section 270A(9) of the Act has been committed by the assessee. Addition made on account of late payment of Employees Contribution to PF & ESI - As observe from the record that disallowance regarding late deposits of Employees Contribution towards PF & ESI were adequately disclosed in Form No.3CD(Tax Audit Report). In the instant case, the return of income for the impugned year i.e AY 2017-18 was filed on 30.11.2017 and Assessment Order was passed on 28.11.2019, therefore, at the time of passing of the Assessment Order, issue of delayed payment towards PF & ESI was debatable issue and issue got settled fully after passing of order in the case of Checkmate Services private limited [2022 (10) TMI 617 - SUPREME COURT] Therefore, in our considered view, the case of the assessee does not fall under any of the provisions of section 270A (9) of the Act viz. (a) misrepresentation of suppression of facts and (c) claim of expenditure not substantiated by any evidence. Disallowance of non-deduction of TDS interest on car loan payable - The details regarding non-deduction of tax from the interest were furnished in Form 3CD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear under consideration, the penalty for under reporting of income which is in consequences to misreporting thereon shall be a sum equal to 200% of the amount of tax payable on under-reported income as per provisions of the Act. section 270A(8)of Accordingly, looking to the facts s of the case, a penalty of Rs. 2,01,100/-imposed under section 270A(2) rws. 270A(9) of the Income Tax Act, 1961 on the under reported income of Rs. 3,04,116/-on the basis of the merit in the case of the assessee. 4. In appeal, the Ld.CIT(A) confirmed the penalty order with the following observations: 6.2 Since the appellant failed to comply with the provisions of sec 40a(ia) coupled with the non-adherence to notification no 11/2016 dated 2nd Dec 2016 the submission of appellant that it has submitted during assessment proceedings does not relieve the appellant from penalty being levied u/s 270A(9) on account of (a) misrepresentation of suppression of facts and (c) claim of expenditure not substantiated by any evidence. 5. The assessee is in appeal before us against the aforesaid order passed by the Ld.CIT(A). 6. At the outset, the Ld. Counsel for the assessee submitted that from the contents of the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty both u/s. 270A(2) of the Act as well 270A(9) of the Act. It would be useful to reproduced some of the judicial precedents which have thrown useful light on the subject which are as follows: i. In the case of Kishor Digambar Patil Vs. Income Tax Officer in ITA No.54 & 55/PUN/2023 vide order dated 30.03.2023, the ITAT has made the following observations on the issue. 6.2. Faced with the situation and in light of overwhelming material strongly supporting the assessee's case and going by stricter interpretation as per Commissioner of Customs (Imports), Mumbai vs. Dilipkumar And Co. & Ors. 2018 (9) SCC 1 (SC) (FB), I am of the view that the above stated judicial precedents regarding the "limb theory" would squarely apply even in case of failure of the Assessing Officer to quote any of the six sub-limbs as well prescribed in sec.270A(9) (a) to (1) of the Act introduced by the legislature in order to rationalize and bring objectivity, certainty and clarity in the penalty provisions". And that his non-compliance to this clinching effect would not only defeat the legislative mandate but also it renders the amending provisions an otiose. I accordingly hold in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GE Capital Us Holding Inc Vs. DCIT(International Taxation) Circle 1(3)(1), New Delhi vide W.P(C) 1646/2022 dated 31.05.2024 has made the following observations: 31. We are further constrained to observe that even the assessment orders fail to base the direction for initiation of proceedings under Section 270A on any considered finding of the conduct of the petitioner being liable to be placed within the sweep of sub-section (9) of that provision. The order of assessment as well as the SCNs' clearly fail to meet the test of "specific limb" as propounded in Minu Bakshi and Schneider Electric. A case of misreporting, in any case, cannot possibly be said to have been made out bearing in mind the fact that the petitioner had questioned the taxability of income asserting that the same would not constitute royalty. iv. Hon'ble Delhi High Court in the case of Prem Brothers Infrastructure Vs. National Faceless Assessment Centre & Anr. New Delhi vide W.P(C) 7092/2022 dated 31.05.2022 has made the following observations: 8. This Court also finds that there is not even a whisper as to which limb of Section 270A of the Act is attracted and how the ingredient of sub-section ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmitted by the assessee. It would be useful to reproduce the relevant extract of section 270A(9) of the Act for ready reference. (9) The cases of misreporting of income referred to in sub-section (8) shall be the following, namely:-- (a) misrepresentation or suppression of facts; (b) failure to record investments in the books of account; (c) claim of expenditure not substantiated by any evidence; (d) recording of any false entry in the books of account; (e) failure to record any receipt in books of account having a bearing on total income; and (f) failure to report any international transaction or any transaction deemed to be an international transaction or any specified domestic transaction, to which the provisions of Chapter X apply. 13. Further while confirming the penalty, the Ld.CIT(A) has held that penalty is levied u/s. 270A(9) of the Act, on account of (a)misrepresentation or suppression of fact and (c) claim of expenditure not substantiated by any evidence. 14. In our considered view, in the assessee's set of facts, the above clauses of section 270A(9) of the Act are not attracted at all. In the Assessment Order, addition of Rs. 2,35,839/- has been made on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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